For most of the world, the price of petrol is enough to encourage drivers to choose fuel-efficient cars, but the modest price of fuel in the UAE provides little financial incentive to downsize. Combined with a perception that large 4x4s are safer in local driving conditions, the end result is a profusion of gas-guzzling cars on our roads – with all the environmental costs that entails.
Now the Ministry of Environment and Water is mooting the idea of a "polluter pays" registration system, so that the driver of a fuel-efficient car will no longer pay the same price as the person who drives a huge 4x4. As we reported yesterday, the idea of graduated registration payments based on fuel efficiency is just one idea, with others including discounted or even free parking for those who drive environmentally friendly vehicles.
This notion of providing incentives for each of us to reduce our environmental footprint is tied to a long-term strategy to encourage people to switch to alternative fuel cars. The Emirates Authority for Standardisation and Metrology’s regulations for electric cars are scheduled to take effect by the end of the year, to match the deadline for the creation of around 100 charging stations. These steps are designed to encourage the use of electric cars here.
Although there is an element of environmental responsibility that leads drivers to choose fuel-efficient vehicles, the experience across the developed world is that there is a very strong correlation between the cost of running a car and the fuel efficiency of the average vehicle. Decisions that affect the hip pocket have a powerful impact on driver behaviour, and doing so via registration is better than raising the cost of fuel, which would have the unintended effect of making businesses here less competitive.
This suggestion, if implemented, will fit into a general trend to more closely match the financial cost of how we live our lives with the environmental cost. The deregulation of petrol prices this year was designed to encourage more moderate use, as well as to remove the distortionary effect of subsidies. Similarly, the increase in the price of electricity and water was designed to encourage us to use them more thoughtfully and carefully.
All this reflects the need to measure the true cost of living, which often bears only a marginal correlation to the cost in dirhams. If higher registration costs encourage drivers to downsize, it’s the planet that wins.
